Microsoft late on Tuesday issued a nearly finished version of Windows XP to testers, signaling it plans to release final code earlier than expected. The software giant had told PC makers to expect final code, which would be used to install Windows XP on new computers, around 22 August. But Microsoft now is expected to certify final Windows XP code within the next few days. "This build is not the RTM (release to manufacturing) build. However, we are very close," the most recent email from Microsoft to Windows XP beta testers states. The Windows XP version released on Tuesday is labelled build 2542. Microsoft issued the last publicly available build, 2526, to about 250,000 testers three weeks ago as Windows XP Release Candidate 2. Microsoft is also expected to release Internet Explorer 6, which is integrated into Windows XP, about the same time as the final Windows XP code. When that happens, IE 6 will also become available for download from Microsoft's Web site for older Windows versions, such as 98, Me and 2000. The sooner Microsoft delivers final Windows XP code to PC makers, the more time there will be to prep the operating system for new PCs. New PCs containing Windows XP are expected to go on sale 24 September, about a month before the new operating system's official launch date. Typically, computer manufacturers need between four to six weeks to test and prepare a new operating system for their PCs and portables. Microsoft's decision to relax Windows XP licensing provisions has generated considerable interest among service providers and software companies about securing a good spot on the Windows XP desktop and Start Menu, sources close to PC makers report. Those changes give PC makers broad freedom to place icons on the Windows XP desktop and make up to five of the eight spots available on the redesigned Start Menu. AOL and AltaVista are among the companies brokering deals for prime placement. "I wouldn't be surprised if we were cutting deals right up until we ship new systems out the door," said a source close to one PC maker, who asked not to be identified. Microsoft has taken flak for its handling of Windows XP licensing changes. The company failed to publicly disclose at the time of its 11 July announcement of the changes that PC makers would be forced to place some Microsoft icons, such as Windows Media Player, on the XP desktop, angering some PC makers and software developers. "Microsoft has become rather dug-in and intransigent over the last few weeks, with the latest announcements of the repercussions [PC makers] will have from allowing other software icons on the desktop," said Jonathan Jacobson, an antitrust attorney with Akin, Gump, Strauss, Hauer & Feld in New York. "That seems to be extremely aggressive, and, frankly, ill advised." Microsoft also had promised that consumers could use Windows XP's Add/Remove feature "to remove end-user access to the Internet Explorer components of the operating system," the company's mid-July news release states. The most recent Windows XP release allows removal of Internet Explorer 6 icons from the desktop and Start Menu. But Internet Explorer remains accessible from almost anywhere else in Windows XP, such as the search and update features as well as from any folder in the file system. "My understanding is they were just talking about the icons," Gartner analyst Michael Silver said. "Internet Explorer is so pervasive in the operating system, you really can't remove access to it." Other analysts said the wording of Microsoft's news release was vague, leading to confusion over what the company planned to do. "Have they removed end-user access to Internet Explorer?" asked Guernsey Research analyst Chris LeTocq. "Definitely not. Because they've made general purpose use of IE so prevalent throughout the operating system, it's still there." "It's a little bit like coming back to the Kodak thing. You have a file type, and the browser is the only place to view it," LeTocq said. On Monday, Kodak and Microsoft settled a dispute over what would be the default media type for accessing content on digital cameras. LeTocq likened that situation to Internet Explorer's pervasive presence in Windows XP. "Kodak is right to be concerned, because if they look at the way the browser has gone they're likely to find picture types are...a default part of the operating system down the road." Windows XP will be available in Home and Professional versions, which to the customer are nearly identical. But the Professional version will offer more sophisticated networking, dual-processor support and other advanced features not typically used in the home. The latest Windows XP build fully enables Microsoft's controversial product activation technology that locks the software to a particular hardware configuration. Office XP uses a similar locking mechanism. Throughout the testing process, people had 14 days to activate Windows XP before the operating system stopped working. In the newest build, the period has been extended to 30 days. Beta testers also had been able to use one key for many installations and for both the consumer and commercial versions of Windows XP. Now, like with the shipping product, only one key can be used per installation and the keys are different for the two Windows XP versions. "Starting with build 2542, Windows XP beta testers will need to use new product keys," the most recent beta tester email states, also warning "significant changes to the hardware configuration of this machine will require a subsequent telephone call to activate." One of the most controversial issues with product activation is the need to reactivate the software if too many changes are made to the PC hardware. Activating Windows XP requires a valid 25-key code entered during the installation and that the PC later connects to Microsoft servers via the Internet to lock the software to the hardware configuration. If the PC hardware is changed too many times, a phone call to Microsoft is required to obtain a one-time use, 44-key code to reactivate the software. Although some people have raised privacy concerns about product activation, Microsoft lead product manager Jim Cullinan emphasised in a recent interview that "no personal information is collected during the process. Registration is optional." Microsoft last week posted a document trying to dispel concerns over privacy and product activation. Still, Microsoft faces more challenges with the controversial technology developed to thwart software piracy. Software maker InterTrust has asked a California court for an injunction delaying Windows XP's launch, alleging the activation technology violates four of its patents. See the Windows XP News Section for the latest XP headlines. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Microsoft forum. Let the editors know what you think in the Mailroom. And read other letters.